1.1                          A bill for an act
  1.2             relating to insurance; automobile; permitting users of 
  1.3             rental vehicles to benefit from lower price rental 
  1.4             periods without losing coverage; amending Minnesota 
  1.5             Statutes 1994, section 65B.49, subdivision 5a. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1994, section 65B.49, 
  1.8   subdivision 5a, is amended to read: 
  1.9      Subd. 5a.  [RENTAL VEHICLES.] (a) Every plan of reparation 
  1.10  security insuring a natural person as named insured, covering 
  1.11  private passenger vehicles as defined under section 65B.001, 
  1.12  subdivision 3, and pickup trucks and vans as defined under 
  1.13  section 168.011 must provide that all of the obligation for 
  1.14  damage and loss of use to a rented private passenger vehicle, 
  1.15  including pickup trucks and vans as defined under section 
  1.16  168.011, and rented trucks with a registered gross vehicle 
  1.17  weight of 26,000 pounds or less would be covered by the property 
  1.18  damage liability portion of the plan.  This subdivision does not 
  1.19  apply to plans of reparation security covering only motor 
  1.20  vehicles registered under section 168.10, subdivision 1a, 1b, 
  1.21  1c, or 1d, or recreational equipment as defined under section 
  1.22  168.011.  The obligation of the plan must not be contingent on 
  1.23  fault or negligence.  In all cases where the plan's property 
  1.24  damage liability coverage is less than $35,000, the coverage 
  1.25  available under the subdivision must be $35,000.  Other than as 
  2.1   described in this paragraph, nothing in this section amends or 
  2.2   alters the provisions of the plan of reparation security as to 
  2.3   primacy of the coverages in this section.  This subdivision does 
  2.4   not apply if the insured's liability coverage has been 
  2.5   terminated or suspended or is otherwise not in effect at the 
  2.6   time of the loss. 
  2.7      (b) A vehicle is rented for purposes of this subdivision if 
  2.8   the rate for the use of the vehicle is determined on a monthly, 
  2.9   weekly, or daily basis.  A vehicle is not rented for purposes of 
  2.10  this subdivision if the rate for the vehicle's use is determined 
  2.11  on a monthly or longer period longer than one month or if the 
  2.12  term of the rental agreement is longer than one month.  The 
  2.13  vehicle may be rented for purposes of this subdivision for a 
  2.14  total period of more than one month, provided that this is 
  2.15  accomplished through renewal, extension, or successive 
  2.16  agreements not based upon a rate for a period longer than one 
  2.17  month and not obligating the insured for a period longer than 
  2.18  one month at a time.  A vehicle is not rented for purposes of 
  2.19  this subdivision if the rental contract has a purchase or buyout 
  2.20  option or otherwise functions as a substitute for purchase of 
  2.21  the vehicle. 
  2.22     (c) The policy or certificate issued by the plan must 
  2.23  inform the insured of the application of the plan to private 
  2.24  passenger rental vehicles, including pickup trucks and vans as 
  2.25  defined under section 168.011, and that the insured may not need 
  2.26  to purchase additional coverage from the rental company. 
  2.27     (d) Where an insured has two or more vehicles covered by a 
  2.28  plan or plans of reparation security containing the rented motor 
  2.29  vehicle coverage required under paragraph (a), the insured may 
  2.30  select the plan the insured wishes to collect from and that plan 
  2.31  is entitled to a pro rata contribution from the other plan or 
  2.32  plans based upon the property damage limits of liability.  If 
  2.33  the person renting the motor vehicle is also covered by the 
  2.34  person's employer's insurance policy or the employer's 
  2.35  automobile self-insurance plan, the reparation obligor under the 
  2.36  employer's policy or self-insurance plan has primary 
  3.1   responsibility to pay claims arising from use of the rented 
  3.2   vehicle. 
  3.3      (e) A notice advising the insured of rental vehicle 
  3.4   coverage must be given by the reparation obligor to each current 
  3.5   insured with the first renewal notice after January 1, 1989.  
  3.6   The notice must be approved by the commissioner of commerce.  
  3.7   The commissioner may specify the form of the notice.  
  3.8      (f) When a motor vehicle is rented or leased in this state 
  3.9   on a monthly, weekly, or daily basis, there must be attached to 
  3.10  the rental contract a separate form containing a written notice 
  3.11  in at least 10-point bold type, if printed, or in capital 
  3.12  letters, if typewritten, which states: 
  3.13     Under Minnesota law, a personal automobile insurance policy 
  3.14     issued in Minnesota must cover the rental of this motor 
  3.15     vehicle against damage to the vehicle and against loss of 
  3.16     use of the vehicle.  Therefore, purchase of any collision 
  3.17     damage waiver or similar insurance affected in this rental 
  3.18     contract is not necessary if your policy was issued in 
  3.19     Minnesota. 
  3.20  No collision damage waiver or other insurance offered as part of 
  3.21  or in conjunction with a rental of a motor vehicle may be sold 
  3.22  unless the person renting the vehicle provides a written 
  3.23  acknowledgment that the above consumer protection notice has 
  3.24  been read and understood. 
  3.25     (g) When damage to a rented vehicle is covered by a plan of 
  3.26  reparation security as provided under paragraph (a), the rental 
  3.27  contract must state that payment by the reparation obligor 
  3.28  within the time limits of section 72A.201 is acceptable, and 
  3.29  prior payment by the renter is not required. 
  3.30     (h) To be compensated for the loss of use of a damaged 
  3.31  rented motor vehicle, the car rental company must prove: 
  3.32     (1) that had the vehicle been available, it would have been 
  3.33  rented; and 
  3.34     (2) that no other vehicle was available for rental in place 
  3.35  of the damaged vehicle. 
  3.36     The standard of proof set forth in this paragraph does not 
  4.1   limit the responsibility of a reparation obligor to provide an 
  4.2   insured with coverage for any loss of use for which the 
  4.3   reparation obligor is otherwise responsible.  A car rental 
  4.4   company may be compensated for loss of use of a damaged rental 
  4.5   motor vehicle only for the period when the damaged car actually 
  4.6   would have been rented. 
  4.7      Sec. 2.  [EFFECTIVE DATE AND APPLICATION.] 
  4.8      Section 1 is effective August 1, 1995, and applies to 
  4.9   rentals entered into on or after that date.